TaxTMI 
TaxTMI 
2016 (9) TMI 684
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.... Chapter 70 of the 1st Schedule to Central Excise Tariff Act, 1985 and were availing the input credit of service tax paid on various input services. As per the audit conducted, it was found that during that period December 2006, the respondent availed the input services credit to the extent of Rs. 11,88,500/-, before making payment of the value of the input service and of service tax. As in terms of Rule 4 (7) of Cenvat Credit Rules, 2004 credit can be availed only on or after the day on which the payment is made by an assessee, Revenue entertained a view that the said credit availed prior to making payment of services and service tax, cannot be allowed to the assessee. 3. In view of the above, proceedings were initiated against them whi....
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....t is that M/s Samcor has taken the input service credit before making payment of the value of input service and service tax payable to the service provider. Therefore, the instant case credit has been availed prior to the dates on which M/s Samcor has become entitled to avail the same. Now, the question arises whether the substantial benefit of service tax credit need be denied in totality merely on the ground that it was availed prior to the date when they had became entitled to take the said service tax credit. I find that in this case there is no dispute that M/s Samcor is entitled to the service tax credit taken in this case since ultimately they have made payment of the value of the taxable service and service tax thereon to the servic....
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....ter and monthly abstract of opening balance, credit taken and utilized and closing balance is enclosed. In the similar instance Hon'ble Tribunal in the case of CCE, Surat II vs. Whit En-All Pvt. Ltd. reported in 2004 (175) E.L.T. 0119 (Tri. Mumbai) has held that : "The goods are duty paid and used in the manufacture of finished goods. The only lapse on the part of the respondents is that instead of taking credit on 08/4/1994 the credit was taken on 06/4/1994. It is also not brought on record that this credit was utilized before 08/4/1994. As long as there is no dispute regarding receipt and utilization of inputs in the appellant's factory for manufacture of finished goods the Modvat credit being a substantial right cannot be de....
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....larified that if Cenvat credit is reversed before utilization, it would amount to credit not having been taken. From the records it is proved that M/s Samcor have not utilized the credit prior to entitlement of the same, therefore, following the decision of Apex Court in the case of M/s Bombay Dying & Mfg. Co. Ltd. (supra) and the Board Circular referred to above I set aside the impugned order demanding interest on the credit which has not been utilized till they became entitled to it. (iii) As regards Department contention that equal penalty ought to have been imposed on M/s Samcor in terms of Section 11AC of Central Excise Act, 1944, it is stated for imposition of penalty under Section 11AC of the Act it is provided that where an....